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The coronavirus pandemic will have a major impact on the global economy. In France, the growth outlook forecasts a net decline of -6% in GDP and a 100% deterioration in public debt in 2020. This is why the government, with the support of BPI France, mobilised very early on to support economic activity.
On 31 March, Bruno Le Maire and the Secretary of State to the Minister of Foreign Affairs, Jean-Baptiste Lemoyne, stated that they were setting up an export support mechanism to support “companies that are very much affected by the slowdown in world trade”, including the luxury goods industry. They have therefore activated several financial tools to support exporting companies, including the strengthening of the granting of State guarantees for guarantees and pre-financing of export projects. For SMEs and ETIs, the guarantee ratio has been raised to 90%.
The government has also announced the extension for one year of the prospect insurance policies already in force and the provision of information and support facilities for the “Team France Export”, which brings together BPI France, the Chambers of Commerce and Industry and Business France. Finally, short-term export credit insurance will be increased to 2 billion euros.
On 3 April, the Ministry of the Economy and Finance also took stock of the general business support measures which represent an estimated cost of 45 billion euros.
The deferral of the payment of social security contributions.
All companies will be able to defer the payment of their social security contributions initially scheduled for 15 April. The deadline of 20 April for monthly self-employed persons is also postponed. Self-employed persons will be able to adjust their payment on 30 April. The same terms and conditions apply to farmers and employers in the agricultural scheme. For all employers with monthly and quarterly payments who must pay their pension contributions before April 25, a deferral will be granted.
Deferral for direct taxes
All companies in difficulty will be able to request an extension of their deadlines in April. This is also the case for tax charges for which no penalties will be applied.
The reform of short-time working
The State has decided to reform the partial activity scheme in order to cover 100% of the compensation paid to employees by companies which will have 30 days to declare partial unemployment with retroactive effect. This decision will cost €8.5 billion over 2 months.
The creation of a solidarity fund of 2 million euros
A solidarity fund of EUR 2 billion, which can also be subscribed to by businesses and individuals, has been set up. It is intended to support small businesses (VSEs, self-employed and microenterprises) with an annual turnover of less than 1 million.
The scheme will be increased on a case-by-case basis for businesses employing less than one employee. This fund is intended in particular for small businesses with less than 50% turnover in March 2020 compared to March 2019: a grant of 1,500 per month will then be paid by the DGFIP upon simple declaration.
Guarantees for bank loans to companies
The State will act as guarantor for new bank loans taken out by companies up to 300 million euros in order to maintain companies’ cash flow.
The banks have already agreed to defer the repayment of loans to companies for up to 6 months without charge.
Negotiations are under way for the deferral of rents and invoices.
The government has appealed to private landlords to allow their tenants to defer their rent payments once the crisis is over.
Similarly, it is negotiating with EDF for electricity and Engie for gas in order to obtain a postponement of bills.
Helping to revive public procurement markets
The public procurement code could be suspended from six months to one year to unblock and restart public works as soon as possible.
Thought should be given to supporting large companies
Although they are better able to withstand the effects of the crisis, large companies have not been forgotten. The government therefore does not rule out recapitalisation, equity investments or even nationalisation if necessary.
Featured Photo : Le ministre de l’Economie le 8 avril. © IAN LANGSDON[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]
The coronavirus pandemic will have a major impact on the global economy. In France, the growth outlook forecasts a net decline of -6% in GDP and a 100% deterioration in public debt in 2020. This is why the government, with the support of BPI France, mobilised very early on to support economic activity.
On 3 April, the Ministry of the Economy and Finance also took stock of the general business support measures which represent an estimated cost of 45 billion euros.[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
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The coronavirus pandemic will have a major impact on the global economy. In France, the growth outlook forecasts a net decline of -6% in GDP and a 100% deterioration in public debt in 2020. This is why the government, with the support of BPI France, mobilised very early on to support economic activity.
On 3 April, the Ministry of the Economy and Finance also took stock of the general business support measures which represent an estimated cost of 45 billion euros.[/vc_column_text][vc_cta h2=”This article is for subscribers only.” h2_font_container=”font_size:16″ h2_use_theme_fonts=”yes” h4=”Subscribe now!” h4_font_container=”font_size:32|line_height:bas” h4_use_theme_fonts=”yes” txt_align=”center” color=”black” add_button=”right” btn_title=”I SUBSCRIBE!” btn_color=”danger” btn_size=”lg” btn_align=”center” use_custom_fonts_h2=”true” use_custom_fonts_h4=”true” btn_button_block=”true” btn_custom_onclick=”true”]Unlimited access to all the articles and live a new reading experience, preview contents, exclusive newsletters…
Already have an account? Log in.[/vc_cta][vc_column_text]Featured Photo : Le ministre de l’Economie le 8 avril. © IAN LANGSDON[/vc_column_text][/vc_column][/vc_row]
